Tuesday 28 March 2017

New raid on €14bn left in pension fund

Donal O'Donovan

Donal O'Donovan

THE Government is planning further raids on the €14bn left in the National Pension Reserve Fund (NPRF), this time to help finance credit-starved small business.

The fund is currently working to develop new pools of cash to provide equity, finance and restructuring and recovery capital to help small and medium-sized enterprises (SMEs), the minister said.

They will range in size from €100m to €400m.

The NPRF was originally set up to be a national savings account. The biggest government raid on it was €20.7bn to help bail out the banks. Those investments are now valued at just €8bn.

Using the fund to support SMEs is likely to require legislative changes to free its managers of the obligation to get the best return possible on the money they manage.

The NPRF is expected to partner with a number of international funds as it sets up and runs the new investment pools.

London-based Blue Bay is tipped to become a partner.

The NPRF agreed a similar tie-up deal earlier this year with California based Silicon Valley Bank, a specialist lender to hi-tech firms – but on commercial terms rather than at the direction of the Department of Finance.

Irish Independent Supplement

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